South Korea offers escape for well-intended blunders

SEOUL (Reuters) - South Korean officials who faced the prospect of losing their job or even jail for failed policy initiatives will no longer have to worry about punishment if their ideas are aimed at helping the faltering economy, an agency said on Wednesday.

The move from the Board of Audit and Inspection comes in response to concern in local media that the possibility of punishment or even prosecution has stymied officials from crafting policies to steer the export-driven economy through the global financial crisis.

"The Board of Audit and Inspection understands that initiative and aggressive actions by government officials are essential to overcome the recent economic difficulties," the government agency said in a statement.

The board said from now it will not penalize bureaucrats for the problems or adverse side effects caused by their actions if they were launched with the "pure purpose" of helping the public.

In 2006, the audit board found the 2003 sale of Korea Exchange Bank to U.S. private equity house Lone Star contained some flaws. Prosecutors then indicted public officials for malfeasance in response to a public that was seeking justice for what many thought was a sweetheart deal.

But a Seoul high court ruled last month that the $1.2 billion sale of KEB was legal, and cleared a former government official and a former head of the South Korean bank of any wrongdoing in the sale process.